Is Foley, Alabama Good for Airbnb Investment?

To start an Airbnb in Foley, Alabama, begin by researching local regulations through the City of Foley Planning Department, as the city requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow vacation rentals in residential areas with proper permits. Contact Baldwin County for any additional county-level requirements and ensure compliance with Alabama state tax obligations including lodging taxes of approximately 13-14%. Find a suitable property in popular areas near Gulf Shores beaches or downtown Foley, ensuring it meets safety requirements including smoke detectors, carbon monoxide detectors, and proper egress windows. Obtain necessary permits including a business license from Foley City Hall (estimated $50-100 annually), fire department inspection clearance, and register for Alabama sales tax collection. Furnish the property with quality furniture, linens, kitchen essentials, and amenities that appeal to beach-goers and families visiting the Gulf Coast area. Create compelling listings on Airbnb, VRBO, and other platforms with professional photography highlighting proximity to beaches, golf courses, and local attractions like OWA amusement park. Implement management systems including automated messaging, professional cleaning services, key exchange solutions, and maintain compliance with ongoing requirements such as quarterly tax filings and annual license renewals while monitoring occupancy limits typically set at 2 guests per bedroom plus 2 additional guests.

To identify profitable short-term rental properties in Foley, Alabama, focus on locations within 10-15 minutes of Gulf Shores beaches, near The Wharf entertainment district, or close to OWA amusement park, as these areas drive the highest tourist demand year-round. Target 3-4 bedroom single-family homes or condos with 2+ bathrooms, pools, outdoor spaces, and modern amenities, as families and groups comprise the primary market segment visiting this coastal region. Conduct pricing analysis using AirDNA and Mashvisor to identify properties generating $150-300+ per night during peak summer months (May-September) and $80-150 during shoulder seasons, with annual revenue potential of $35,000-65,000 for well-positioned properties. Research competition by analyzing similar properties within 3-mile radius using Airbnb and VRBO search filters, noting occupancy rates, pricing strategies, and guest reviews to identify market gaps or oversaturated areas. Utilize local resources including Baldwin County tourism data, Gulf Shores/Orange Beach visitor statistics, and connect with Foley-area real estate agents specializing in investment properties who understand STR regulations and can identify emerging neighborhoods before they become oversaturated with vacation rentals.

To obtain an Airbnb/STR permit in Foley, Alabama, you must first contact the Foley Planning and Zoning Department at City Hall located at 407 East Laurel Avenue to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances. You'll need to submit a business license application through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (typically $1 million minimum), floor plan of the rental unit, parking plan showing adequate off-street parking, and contact information for a local property manager if you're not residing within 50 miles of Foley. The business license fee is approximately $50-100 annually, and you may need to pay additional zoning compliance fees of around $25-75. You must also register with the Alabama Department of Revenue for state tax purposes and obtain a sales tax license, as short-term rentals are subject to state and local lodging taxes of approximately 13-15% total. The approval timeline typically takes 2-4 weeks once all documentation is submitted, and Foley requires that STR properties maintain proper egress, smoke detectors in all sleeping areas, and comply with occupancy limits based on square footage and bedroom count, with most properties limited to 2 guests per bedroom plus 2 additional guests maximum.

Short-term rentals (STRs) are legal in Foley, Alabama, but operate under specific municipal regulations that were updated in recent years. The city requires STR operators to obtain a business license and comply with zoning restrictions that primarily allow these rentals in commercial and mixed-use districts, while residential areas have more limited permissions depending on the specific zoning classification. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators must provide emergency contact information to the city. Foley implemented stricter noise ordinances around 2020-2021 that particularly affect STRs, with violations potentially resulting in permit revocation. The city also requires STR operators to collect and remit local lodging taxes, and there are occupancy limits based on the property size and parking availability. Recent changes have included enhanced enforcement mechanisms and clearer definitions of what constitutes a short-term rental versus other lodging types, with the city working to balance tourism revenue with neighborhood preservation concerns.

The best areas for Airbnb investment in Foley, Alabama include the downtown historic district near McKenzie Street, which attracts visitors interested in local dining, shopping, and cultural events, and the areas near Gulf State Park and the Foley Beach Express corridor, which serve as strategic locations for tourists heading to Gulf Shores and Orange Beach. The neighborhoods around the Tanger Outlets on South McKenzie Street are particularly attractive due to heavy shopping tourism year-round, while properties near the OWA amusement park and entertainment district in nearby areas capture family vacation rentals. The residential areas along Highway 59 South benefit from business travelers visiting local manufacturing facilities like Evonik Industries and visitors to the annual Shrimp Festival, while properties within a few miles of Graham Creek Nature Preserve appeal to eco-tourists and outdoor enthusiasts seeking nature-based accommodations.

In Foley, Alabama, Airbnb hosts are subject to both state and local lodging taxes that must be collected from guests and remitted to appropriate authorities. The Alabama state lodging tax is 4% on gross receipts from short-term rental accommodations under 180 days, collected by hosts and remitted monthly to the Alabama Department of Revenue by the 20th of the following month if monthly gross receipts exceed $200. Baldwin County imposes an additional 2% lodging tax on short-term rentals, which must be remitted quarterly to Baldwin County Revenue Commission. The City of Foley levies a 5% occupancy tax on transient accommodations, collected by hosts and remitted monthly to the City of Foley Finance Department by the 15th of the following month, with returns required even if no tax is due. Combined, Airbnb guests in Foley pay approximately 11% in total lodging taxes. Exemptions typically apply to stays exceeding 30 consecutive days, rentals to permanent residents, and accommodations provided to certain government employees on official business. Hosts must register with each taxing authority, obtain appropriate licenses, maintain detailed records of all transactions, and file returns according to prescribed schedules, with penalties and interest applied for late payments or non-compliance.

To start an Airbnb in Foley, Alabama, expect total costs around $185,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 based on median home prices in the area. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$4,000. Permits and fees in Baldwin County include business license ($50-$100), short-term rental permit ($200-$500), and potential HOA approval fees totaling $500-$1,000. Insurance for short-term rentals runs $1,200-$2,400 annually, with six months costing $600-$1,200. Utility setup and deposits for electricity, water, internet, and cable average $500-$800 initially, with monthly costs of $200-$350, totaling $1,700-$2,900 for six months. First six months operating costs including cleaning services ($150-$250 per turnover), maintenance reserves ($200-$400 monthly), marketing ($100-$300 monthly), and platform fees (3% of bookings) typically total $3,000-$6,000 depending on occupancy rates and property size.

Airbnb properties in Foley, Alabama show moderate profitability potential with average daily rates ranging from $85-$150 depending on proximity to Gulf Shores beaches and property amenities. Properties within 10 miles of the coast typically generate $25,000-$45,000 in annual revenue, while inland properties average $18,000-$30,000 annually. Operating expenses including cleaning fees ($75-$100 per turnover), property management (15-25% of revenue), insurance ($1,200-$2,000 annually), utilities ($150-$250 monthly), and maintenance typically consume 45-60% of gross revenue, resulting in net profit margins of 15-35% for well-managed properties. Success factors include strategic location near Gulf State Park or Orange Beach, professional photography, competitive pricing during peak summer months (June-August), and maintaining high cleanliness standards to achieve Superhost status. A typical 3-bedroom beach house purchased for $280,000 in 2022 generated $38,000 in revenue with $22,000 in expenses, yielding a 5.7% cash-on-cash return plus property appreciation, while a 2-bedroom condo closer to Foley's downtown achieved $24,000 revenue with $14,000 expenses for a 3.6% return, demonstrating that coastal proximity significantly impacts profitability in this market.

Airbnb investments in Foley, Alabama typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, driven by the city's proximity to Gulf Shores beaches and Orange Beach tourism destinations. Properties within 10 miles of the coast, particularly 3-4 bedroom vacation homes priced between $200,000-$350,000, achieve occupancy rates of 60-75% during peak season (March-September) with average daily rates of $150-$250. Investors can expect to reach profitability within 18-24 months, with stronger performance from properties featuring pools, beach access, or golf course proximity that cater to families visiting nearby attractions like The Wharf entertainment district and Gulf State Park. The market benefits from consistent demand from Birmingham and Atlanta visitors, with annual appreciation rates of 4-6% complementing rental income to achieve total returns of 16-24% for well-positioned properties.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Foley, Alabama. Local real estate agents in the area include Coastal Alabama Realty, Gulf Shores Realty, and RE/MAX of Orange Beach who have experience with vacation rental properties in Baldwin County. National services like BiggerPockets, Mashvisor, and AirDNA provide market analysis and property identification tools for Airbnb investments in the Gulf Coast region. Vacasa and RedAwning offer property management services for investors purchasing rental properties in Foley, while companies like Awning and HostGPO provide specialized consulting for short-term rental investments. Local property management companies such as Gulf Coast Property Management and Coastal Vacation Rentals can assist with both acquisition advice and ongoing management of Airbnb properties in the Foley market, which benefits from its proximity to Gulf Shores and Orange Beach tourism destinations.